Trump fires head of labor statistics bureau after weak jobs report: Recap
An anemic July jobs report boosted expectations the Federal Reserve might lower interest rates in September. Trump said the jobs report was "rigged."
- Trump fired the head of the Bureau of Labor Statistics, claiming without evidence that she had "rigged" the disappointing July jobs report "to make the Republicans, and ME, look bad."
- The unemployment rate rose to 4.2% in a weak July jobs report.
- Trump said the Federal Reserve Board should sideline Fed Chairman Jerome Powell and vote to lower interest rates.
- China and Mexico, two of the biggest U.S. trading partners, are not part of Trump's tariff blitz. Negotiations continue with both countries.
President Donald Trump fired the head of the Bureau of Labor Statistics after a report showed weak job growth and a small increase in the unemployment rate.
"I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY," Trump said on Truth Social of Erika McEntarfer. "She will be replaced with someone much more competent and qualified."
"In my opinion, today’s Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad," Trump said without evidence.
The unusual move came a day after Trump imposed sweeping new tariffs on imports from across the world, escalating an aggressive trade policy aimed at spurring domestic manufacturing in the United States.
U.S. stocks were lower on August 1, ahead of what turned out to be a disappointing July jobs report that saw unemployment rise from 4.1% to 4.2%.
The new tariff rates, which will go into effect in seven days, came before an Aug. 1 deadline Trump gave about 180 countries to either reach trade deals or face higher import duties. Trump had twice set earlier deadlines for new tariffs before backing down.
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Trump fires the messenger after poor jobs report
President Donald Trump said he's ordered the firing of Erika McEntarfer, the U.S. commissioner of Labor Statistics, accusing her without evidence of manipulating figures for "political purposes" after the Labor Department reported the U.S. added a disappointing 73,000 jobs in July.
Trump on Aug. 1 announced the move in a post on his social media app Truth Social, writing that he was "just informed that our Country’s 'Jobs Numbers' are being produced by a Biden Appointee, Dr. Erika McEntarfer."
In addition to the July jobs report ‒ below the 105,000 new jobs that were estimated ‒ the Labor Department's job gains for May and June were revised down by 258,000, portraying a much weaker labor market than believed in late spring and early summer.
"Important numbers like this must be fair and accurate, they can’t be manipulated for political purposes," Trump said.
A labor economist, McEntarfer has worked 20 years in the federal government, including previous stints at the U.S. Census Bureau and Treasury Department.
-Joey Garrison
Tariffs 'starting to bite into' jobs market
Economists say July’s disappointing jobs report stems at least in part from tariffs.
Businesses have held off on major investments like hiring amid uncertainty on how tariffs will impact consumer spending and inflation. A recent survey from the National Association for Business Economics found one in four companies plan to delay hiring or investments over the next six months.
Job gains averaged just 35,000 over the past three months after figures for May and June were revised down by 258,000. In the same period last year, job gains averaged nearly 123,000.
“Clearly the tariffs, the policy, is starting to bite into the labor market,” Elizabeth Crofoot, senior economist and principal researcher at Lightcast, told Paste BN.
-Bailey Schulz
Tariff uncertainty contributed to weak jobs report, White House acknowledges
A top White House economic adviser acknowledged that "uncertainty" over President Trump's tariffs contributed to the weaker than expected jobs report.
Council of Economic Advisers Chairman Stephen Miran argued on MSNBC that July's number was "decent" but admitted that downward revisions to May and June "are not great." He chalked those up to seasonal factors such as teachers on summer break and cited Trump's border policies, which he said were eliminating jobs held by foreign workers.
"Finally, there was, you know, some uncertainty over tariffs, as we were negotiating," he said.
The uncertainty was needed to create leverage, he said. "But that uncertainty is now resolved, the trade deals are in place, the One Big Beautiful Bill is law, both the trade deals and the tax bill have very powerful incentives to create an economic boom in America."
-Francesca Chambers
Does the Fed get an early peak at the monthly jobs report?
Not really.
According to Willam Poole, former chief executive of the St. Louis Federal Reserve, the Fed has “a minimal advantage, if any, in terms of knowledge of facts.”
It is so minimal that it doesn’t really matter, he wrote in an article posted on the Richmond Fed’s website. What data Federal Reserve Chair Jerome Powell receives also comes after the Fed’s monetary policy meeting and decisions have been made.
“The Fed chair gets the unemployment report through the chair of the CEA (Council of Economic Advisers) late Thursday afternoon, just a few hours before the Bureau of Labor Statistics releases the data publicly on Friday at 8:30 a.m.” Eastern time, he said. “This same "advantage" of a few hours is true of all the data released by federal statistical agencies.”
-Medora Lee
Stock sell-off continues
U.S. stocks remained negative as investors responded to Trump's tariff blitz and a disappointing July jobs report.
At 12:26 p.m. ET, the blue-chip Dow fell 0.99%, or 438.66 points, to 43,692.32; the broad S&P 500 slipped 1.16%, or 73.52 points, to 6,265.87, and the tech-heavy Nasdaq declined 1.58%, or 334.17 points to 20,788.28. The benchmark 10-year Treasury yield felll to 4.237%
Both the S&P 500 and the Nasdaq were on track for their worst single-day performance since April 21.
BeiChen Lin, senior investment strategist at Russell Investments, told Reuters U.S. job growth has been mostly concentrated in previously understaffed sectors like healthcare and social assistance. "The breadth of job creation has steadily declined in recent months," Lin said.
-Medora Lee
Canada may ditch U.S. trade talks
The Canadian team working on a trade deal with the United States could walk away from talks in the wake of a U.S. decision to impose a 35% tariff on some goods from Canada, an adviser to Prime Minister Mark Carney said on Friday.
Flavio Volpe, a member of Carney's hand-picked Council on Canada-U.S. Relations, told CBC News that the negotiators would stay in Washington for the time being. President Donald Trump on Thursday signed an executive order increasing tariffs on Canadian goods to 35% from 25% on all products not covered by the U.S.-Mexico-Canada trade agreement.
The White House cited what it said was Canada's failure to stop fentanyl smuggling and a failure to address U.S. concerns about trade barriers.
"Team Canada is still in Washington working on a deal and they're going to be there until we either have a conclusion of a good deal for Canada or that it's time to take a pause and walk away," said Volpe, president of Canada's national Automotive Parts Manufacturers' Association.
Carney wants a new deal to reset bilateral relations, saying Trump's move to impose tariffs had irrevocably upended the decades-old trading and security ties between the two neighbors. The talks though have so far produced little.
-Reuters
Coffee catastrophe? Brazilian beans will head to China, analysts say
The Trump administration's steep import tariff on Brazilian coffee looks set to reshuffle trade routes for beans from the world's top grower and exporter, benefiting China and incentivizing traders to look for indirect routes into the U.S.
A 50% tariff on some Brazilian products, including coffee, will begin on August 6, the Trump administration said this week. The move will challenge commodities traders and Brazilian coffee exporters to find buyers for the roughly 8 million bags sold to U.S. coffee processors every year.
At around 25 million bags per year, the U.S. is the world's largest coffee consumer. A third of that comes from Brazil, through bilateral trade that was worth $4.4 billion in the 12 months ended in June.
"The global coffee trade flow will be reshuffled. The pain will be felt from Sao Paulo to Seattle - from origin to roaster, to cafe chains, grocers, and morning commuters," said Michael J. Nugent, a senior U.S. coffee broker and owner of MJ Nugent & Co.
-Reuters
Poor jobs report boosts chances of a rate cut
The much weaker-than-expected report is likely to trigger a Federal Reserve rate cut, economists said. The CME FedWatch tool that tracks the market's odds the Fed will change interest rates at upcoming meetings shows an 83% chance of a rate cut in September.
"This payroll report kicks the door wide open for a September rate cut," said Jeff Schulze, head of economic and market strategy at ClearBridge Investments. "Although the effects of tariff pass-through still lie ahead, the Fed will not want to wait too long to begin its cutting cycle."
-Medora Lee
Swiss aren't neutral over Trump tariffs on luxury watches and chocolate
The Swiss watch industry has been suffering from weak global demand and sales lately. A decision by the Trump administration to impose a 39% tariff on Switzerland may add to their hard time.
The Swiss government said it viewed the White House's new tariffs with "great regret" and said it "continues to strive for a negotiated solution."
Only Laos and Myanmar (also known as Burma), at 40%, and Syria, at 41%, fared worse than Switzerland in Trump's fresh avalanche of tariffs.
The Alpine country now has until Aug. 7 to work out a trade deal with the United States or chocolate, jewellery and, yes, watches, will be subject to levies more than double the 15% rate for most European Union imports into the United States. Switzerland's pharmaceuticals sector was not included in the tariffs.
-Kim Hjelmgaard
Morning stocks down on tariff and unemployment news
At 9:46 a.m. ET, the blue-chip Dow fell 1.33%, or 588.22 points, to 43,542.76; while the broad S&P 500 slipped 1.62%, or 102.73 points, to 6,236.66, and the tech-heavy Nasdaq declined 2.13%, or 449.35 points to 20,673.10.
-Medora Lee
Trump defends tariffs, says he’s open to future deals
In an interview with NBC the evening of July 31, Trump said his aggressive tariff plan will rake in “hundreds of billions of dollars, and very quickly.”
Opponents have raised concerns about potential price increases from the heavy tariffs. The president dismissed those warnings. “The only price that’s spiked is the hundreds of billions of dollars coming in,” Trump said.
The new rates will go into effect in seven days. Trump told NBC it is “too late” for countries to reach an agreement to prevent those duties.
But, he said, “It doesn’t mean that somebody doesn’t come along in four weeks and say we can make some kind of a deal.”
-Savannah Kuchar
Unemployment up on weak U.S. jobs report
U.S. employers added a disappointing 73,000 jobs in July as payroll growth slowed amid President Donald Trump's sweeping import tariffs, an intensifying immigration crackdown and massive federal layoffs.
The unemployment rate rose from 4.1% to 4.2%, the Labor Department said Friday.
Before the report was released, economists had estimated that 105,000 jobs were added in July.
-Paul Davidson
Dem senator: Trump will ‘turn on a dime’ if economy sours
Sen. Chris Coons, D-Delaware, told CNN he anticipates the economy will take a heavy hit from Trump’s tariffs – and that if conditions sour too much, the president may shift positions.
“If the stock market and the jobs report and the inflation numbers over the next couple of weeks all head in the wrong direction,” Coons said, “I suspect you’ll see Trump turn on a dime and change his tariff policy and position.”
Higher prices will be the “inevitable outcome,” the Delaware senator said.
“It’s the opposite of what he ran on, which was lowering costs.”
-Savannah Kuchar
China and Mexico not part of Trump's tariff blast
Not included in Trump's order are two of the United States' largest trading partners, China and Mexico.
Trump and Chinese officials have discussed extending a 90-day tariff truce that the two sides struck in May in which both countries held off on imposing massive, triple-digit tariffs on imports on one another.
Trump on July 31 said he's giving Mexico another 90 days to come to a long-term agreement with the United States to avoid higher tariffs. In the meantime, Mexican imports will still be levied with a 25% tariff that Trump imposed over the flow of fentanyl from the country.
-Joey Garrison
Trump tariffs put a new spin on the Canadian Old-Fashioned
An Old-Fashioned without Kentucky bourbon?
Oh, Canada.
Starting in February, bars and liquor stores in Canada removed bourbon and other U.S.-made spirits and wines from their shelves to protest President Donald Trump’s tariff policies and his unwelcome suggestion that our northern neighbors become the 51st U.S. state.
Trump’s overtures have not gone over well in French-speaking Quebec or the other Canadian provinces. Canadians have found all kinds of ways to let the American president know what he can do with his scandaleux proposition. Some are proudly flying their country’s red-and-white Maple Leaf flag. Others are wearing T-shirts that declare “Canada Is Not For Sale.”
-Michael Collins
Trump wants the Fed board to sideline Powell in long-running interest rate spat
President Trump said the Federal Reserve board should seize control if Fed Chair Jerome Powell continues to refuse to lower interest rates.
"Jerome 'Too Late' Powell, a stubborn MORON, must substantially lower interest rates, now. if he continues to refuse, the board should assume control, and do what everyone knows has to be done!" Trump said in a post on Truth Social.
The U.S. central bank held interest rates steady on July 30 and Federal Reserve Chair Jerome Powell's comments after the decision undercut confidence that borrowing costs would begin to fall in September, stoking Trump's ire.
The latest policy decision was made by a 9-2 vote, which passes for a split outcome at the consensus-driven central bank, with two Fed governors dissenting for the first time in more than 30 years.
-Reuters
Fed dissenters say unemployment fears drove votes to lower interest rates
The two Federal Reserve governors who favored an interest rate cut at the U.S. central bank's policy meeting this week said on Friday they did so largely due to rising concerns about the job market, amid expectations that any price increases related to trade tariffs will not lead to lasting price pressures.
"With economic growth slowing this year and signs of a less dynamic labor market, I saw it as appropriate to begin gradually moving our moderately restrictive policy stance toward a neutral setting," Vice Chair for Supervision Michelle Bowman said in a statement. "In my view, this action would have proactively hedged against a further weakening in the economy and the risk of damage to the labor market," she said.
Governor Christopher Waller said in a separate statement that "with underlying inflation near target and the upside risks to inflation limited, we should not wait until the labor market deteriorates before we cut the policy rate." Waller said the job market is nearing stall speed and the Fed's rate target should be closer to its neutral level.
-Reuters